State pops the cork on new business laws

Low interest rates, corkage rules top state efforts

Beginning July 1, small businesses in Maryland will have another tool to attract needed capital.

The law helping small companies obtain loans at lower-than-market interest rates is among those that impact businesses taking effect next month.

The state has had a similar program since 2009 for women- and minority-owned businesses.

“It’s a very good program. It reduces the interest rate you pay, which saves you money,” said Jacqueline Manzini, owner of Amtrac Railroad Contractors of Maryland.

The Hagerstown railroad contractor obtained a loan through that program in 2009, using the funds to pay for equipment and its annual insurance premium renewal.

“It’s good to know there is another program. There is really no drawback to it,” Manzini said.

The new law will expand the lower-cost loans to small companies that qualify for the Small Business Reserve Program, which requires 23 state agencies to reserve at least 10 percent of the dollar value of their procurements for bids by certified small businesses.

To qualify for the reserve program, small businesses have to meet limits for both employees and average gross sales. Another law that takes effect Oct. 1 will let a company qualify by meeting either threshold.

The limits vary depending on industries; retail businesses cannot have more than 25 employees and $3 million in average gross sales. Service companies cannot field more than 100 employees and gross more than $10 million in average sales.

The state will deposit funds into participating banks, matching their loan amounts up to a program total of $50 million. Business owners obtain loans at 2 percentage points below the market rate.

Corkage law also takes effect July 1

Another law becoming effective next month will put Maryland in line with about 25 other states and Washington, D.C., in allowing customers to bring their own bottles of wine into licensed restaurants.

The state now only allows that practice, called corkage, in unlicensed establishments.

“This is really only for the higher-end restaurants,” said Adam Borden, president of Marylanders for Better Beer & Wine Laws, an advocacy group that supports the law. “It’s not like McDonald’s will be doing this.”

Restaurants can decide whether they want to offer the service and have to apply for a special permit with local licensing boards. They can apply a fee for the service.

In Maryland, business has been lost by not allowing corkage, Borden said. He is a member of a wine group whose members recently traveled out of state to dine and bring their own bottles inside a restaurant.

“That was a couple thousand dollars lost by the state right there,” Borden said.

The wine brought in must not already be available for sale at the restaurant.

Revenues from wine sales may decrease for some restaurants due to lost wine sales, though sales may increase because of the potential to attract new patrons, according to a state legislative analysis.

Jaleo in Bethesda is among the restaurants that plan to offer corkage. The chain’s Washington, D.C., restaurant charges $20 for customers to pop their own bottle corks.